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Demonetization would only affect common man: P. Chidambaram

Central Board of Direct Taxes (CBDT) in 2012 had advised the Centre to avoid issuing Rs2,000 currency notes, saying it would bring more harm to the public than benefit, P Chidambaram said addressing media in Chennai on Saturday. Photo: PTIPremium
Central Board of Direct Taxes (CBDT) in 2012 had advised the Centre to avoid issuing Rs2,000 currency notes, saying it would bring more harm to the public than benefit, P Chidambaram said addressing media in Chennai on Saturday. Photo: PTI

Chidambaram says people are facing difficulties in buying medicines, bus and train tickets and paying for auto-rickshaws because of demonetization

Chennai: Disputing government’s claim that demonetisation of higher value currency notes would check black money, former Union finance minister P. Chidambaram on Saturday said it would only adversely affect the common man.

The senior Congress leader said the people were facing difficulties in buying medicines, buying bus and train tickets and paying for auto-rickshaws because most of the notes in circulation were of Rs500 and Rs1,000 denominations.

“They (government) say that the withdrawal of notes that are highly in circulation will not affect the common man. That is quite a funny statement," he said. “It is not a step to curb black money... The Centre’s move will only affect the public and that is my view," he told reporters here.

Chidambaram said that the Central Board of Direct Taxes, in 2012, had advised the Centre to avoid issuing Rs2,000 currency notes, saying it would bring more harm to the public than benefit. “Ignoring it, the Centre has withdrawn Rs500 and Rs1,000 notes that are highly in circulation," he added.

The former Union minister further said that 86% of the total value of currency notes in circulation was in the denomination of Rs500 or Rs1,000. Chidambaram said there were currency notes worth about Rs17 lakh crore in circulation across the country, and according to the RBI, about Rs400 crore of this was believed to be fake currency. “Just to destroy Rs400-crore fake currencies, why the circulation of total Rs17 lakh crore was needed to be blocked," he asked.

On criticism by the BJP that Congress vice president Rahul Gandhi’s standing in a queue to exchange notes was a mere photo opportunity; he reasoned, “What can he do? How can a person live with a currency that is invalid? That is why he went to exchange Rs4,000 (to the bank). I do not know whether the valid notes were exchanged in the houses of the respective ministers. For rest of the people, one has to visit the bank for exchange of notes."

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